EU goes legal against MS – company should open up Windows

The condensed version of the antitrust trial, evidently...

MS on Trial The European Commission has given Microsoft a "statement of objections," which effectively launches an antitrust case against the company on the other side of the pond. Following up on a complaint originally made by Sun, the Commission agrees there is evidence that Microsoft has breached European antitrust rules.

Microsoft now has two months to reply to the statement, after which the Commission will decide on its course of action. Sun's complaint was made in 1998, after Microsoft refused to give it technical information about Windows. The company argues that "Microsoft breached EU antitrust rules by engaging in discriminatory licensing and by refusing to supply essential information on its Windows operating system."

EU competition commissioner Mario Monti agrees with Sun. In a statement he points out that 95 per cent of desktop PCs run Windows, and that Microsoft therefore has an obligation to give its competitors the necessary information to work with them. In Sun's case, this information would allow it to compete with Microsoft in the server market.

This is where the EU case against Microsoft differs from the US one. Although the remedies proposed in the latter do address future conduct, the case itself dealt largely with past sins (albeit including a few that were committed during the trial). The EU is focussing more on the future, and is attempting to intercept what it sees as a bid by Microsoft to leverage its desktop monopoly into a similar monopoly in the server market.

The issuing of the statement indicates that Monti thinks there's strong evidence that Microsoft has been acting illegally, and the solution the Commission favours seems clear. There is "an obligation for Microsoft to disclose its interfaces to enable interoperability with non-Microsoft server software."

Which effectively means Microsoft opening up Windows. Aside from what it sees as a monopoly-derived obligation for Microsoft to do this, the commission also complains that "Microsoft gave information only on a partial and discriminatory basis to some of its competitors. It refused to supply interface information to competitors like Sun Microsystems."

And somebody at the Commission has clearly been reading the US trial transcripts. Monti says the Commission "will not tolerate the extension of existing dominance into adjacent markets through the leveraging of market power by anti-competitive means, and under the pretext of copyright protection. All companies that want to do business in the European Union must play by its antitrust rules and I'm determined to act for their rigorous enforcement."

This doesn't look good. The Commission has power to fine violators up to 10 per cent of global annual revenues. It's never gone beyond 1 per cent so far, but in Microsoft's case the sum could prove temptingly huge. There does however still seem to be more than a hint of the Commission hoping the US case will resolve matters for everyone before it needs to push too hard against the company. Microsoft can ask for more time (it's had a lot of practice in that) and a Commission spokeswoman said a ruling was unlikely before early next year. Leisurely, but still faster than the US process. ®